Managing your credit might not be the first thing on your mind when you’re going through a divorce, but maybe it should be. Solid credit is critical to your long-term financial health.
Does divorce affect your credit score? Divorce itself does not. What does negatively affect your score are the financial shifts and changes to your norm. Shifts like →
- Mismanaged joint accounts
- Ignored or forgotten debts
- Disruptions in bill-paying routines
Sound overwhelming? There’s good news! We’re sharing 7 key steps to follow to protect your credit:
Review your credit report
Go to Annual Credit Report and request a copy of your report from all three agencies, Equifax, Experian, and Transunion. Under federal law you are entitled to a copy of all 3 reports annually.
Keep a close eye on your credit report, and check it regularly. Confirm that everything is accurate and up-to-date. Get a clear understanding of where you stand—what’s your current financial picture? This way, you’ll spot any changes right away.
Close joint accounts
Pay off and close joint credit accounts if you can. Closing the account protects you from future issues, like missed payments or unauthorized purchases.
If you can’t close it right away, talk to your ex about splitting the balance or transferring the debt to individual accounts.
Update authorized users
If you’re listed as an authorized user on your ex’s credit card, get your name taken off ASAP. Same goes if they’re on yours- get their name taken off.
You’re not personally responsible for the other’s debt, but any charges made could still negatively impact your credit. And no one has time for that.
Review your mortgage and other loans
There’s no one right answer to the question, “what should happen with my mortgage after divorce?” The goal is that you and your ex discuss and decide together how to proceed. And you protect your credit and financial health while doing so!
In a nutshell, if your name is on the deed, loan, or bill, you are financially responsible for it = If something goes wrong your credit will take a hit. So what do you do? → Look into refinancing in your name alone, sell the property, pay the balance, transfer the balance.
Make sure you know what your name is on and where. And for more details and specific strategies, chat with a financial pro.
Change account numbers
Let’s take it one step further 👉 Beef up your protection and change your account numbers on any existing individual credit or debit cards.
Is it a hassle? Yes. Is it overkill? Perhaps. But what it will do is make sure that no one accidentally (or intentionally) uses old payment information connected to joint accounts.
We promise – no one ever looks back and says “I wish I didn’t change my account numbers.”
Freeze your credit
Yes, you can do this! Contact the 3 credit bureaus and freeze your credit – do it online or over the phone. It’s simple, easy, and painless. Check out this primer.
What it does is prevent anyone from opening accounts in your name. Consider it an extra layer of protection against fraud or identify theft during a chaotic time.
Stay vigilant
It’s important enough to say it again. Stay on top of your credit score! Tell yourself – this is not a one and done, I need to continue to monitor this.
Check your scores, look for mistakes and inaccuracies, and act on them immediately. There are lots of credit monitoring tools out there to help you (most will charge you something) but they can help you stay on top of this.
You’ve got this!
We know this time is overwhelming, hectic, chaotic, exciting, nerve-wracking- all the things. Taking the small but consistent steps we shared above will 100% help you come out with a stronger financial position on the other side.
We’re here to keep you powerful 💪
